Highlights

• Total flows to mutual funds for May were €53.24bn. Mutual funds attracted €26.24bn, while ETFs took €27.021bn.

• While bond funds saw the largest outflows in April (-€23.16m), in May they were the best-selling asset class (+€35.13bn).

• Equity Global funds were the best-selling classification in May (+€13.24bn: mutual funds, +€6.32bn; ETFs +€6.93bn).

• Conversely, Money Market EUR funds sold off heavily (-€12.42bn), in a reversal of April’s strong gains.

• BlackRock was the best-selling fund manager (+€6.87bn), supported by strong ETF sales.

Relief Rally Sees Investors Back Global Equities and Quality Bonds

May saw equity markets continue their upward march as investors decided to make hay before the tariffs truly bite—if indeed they do—in an ongoing risk rally for risk assets, which saw tech rebound after a difficult period.

Eurozone equities had the best return-to-risk ratio, followed closely by the All-World ex USA and FTSE 100 indices, according to FTSE Russell analysis. In EUR terms, gold remained the best-performing asset class over one year, while oil and copper were in negative territory.

Bonds were the top-selling asset class for the month. Buying on this front has been fairly broad, with investors showing a preference for higher-quality assets, although shunning US Treasuries, given the potential fiscal bind that the Big Beautiful Bill may put the country’s finances in.

European investors backed the equity “relief rally”, as flows to this asset class were the second most popular for the month with top allocations to Equity Global—a classical “we don’t know where to place our bets, but we don’t want to miss the ride” approach—followed by Europe, which was unloved last year. Despite the headlines, European fund buyers are still allocating to the US, albeit in more subdued volumes. On the other hand, April’s rush for euro money market funds (MMFs) sharply reversed, and the asset class saw the largest outflows.

Asset Type Flows

Asset Type Flows May 2025

Graph 1: Estimated Net Flows by Asset and Product Type – May 2025 (€bn)

Source: LSEG Lipper

Total flows to mutual funds for May were €53.24bn, slightly down on April’s €57.9bn. Mutual funds attracted €26.24bn, while ETFs took €27.021bn.

April’s strong inflows to MMFs (+€54.91bn) were reversed in May, with outflows of €10.22bn. Conversely, while bond funds saw the largest outflows the previous month (-€23.16m), in May they top the table (+€35.13bn: mutual funds, +€27.83bn; ETFs +€7.3bn). Equity funds netted +€23.8bn (mutual funds, +€4.82bn; ETFs +€18.97bn).

Some considerable way behind come mixed assets (+€2.6bn), alternatives (+€2.06bn), commodity (+€0.76bn), and other funds (+€0.1bn). Other than MMFs, the only asset type to see outflows was real estate (-€1.03bn).

Asset Type Flows Year to Date

Graph 2: Estimated Net Sales by Asset and Product Type, January 1 – May 31, 2025 (€bn)

Source: LSEG Lipper

Due to May’s strong outflows, MMFs give up their place at the head of the table for YTD flows to equity funds (+€106.62bn: mutual funds, +€1.54bn; ETFs +€105.09bn). Next come MMFs (+€91.66bn: mutual funds, +€82.51bn; ETFs +€9.15bn), followed by bonds (+€78.46bn: mutual funds, +€62.86bn; ETFs +€15.6bn), then mixed assets (+€20.14bn: mutual funds, +€19.71bn; ETFs +€0.43bn). Lagging further behind come alternatives (+€4.85bn: mutual funds, +€3.68bn; ETFs +€1.17bn) and commodity (+€2.89bn: mutual funds, +€2.35bn; ETFs +€0.53bn).

“Other” funds suffered redemptions (-€0.49bn), as did real estate (-€2.61bn).

Fund Flows Active vs Passive Products

Graph 3: Estimated Net Flows by Management Approach and Product Type, May 2025 (LHS);
January 1 – May 31, 2025 (RHS). €bn

Source: LSEG Lipper

Over May, ETFs saw inflows of €27.01bn with mutual fund index trackers attracting €6.94bn and active funds €19.3bn. YTD, those figures are €131.96bn, €19.14bn, and €150.41bn.

When MMFs are stripped out YTD, flows to long-term assets in ETFs were €122.81bn, with the bulk of this going to equity ETFs, while actively managed mutual funds’ share of long-term asset flows was €70.57bn and index tracking mutual funds €16.47bn.

Fund Flows by Lipper Global Classification

Fund Flows by Lipper Global Classification, May 2025

Graph 4: Ten Best- and Worst Lipper Global Classifications by Estimated Net Sales, May 2025 (€bn)

Source: LSEG Lipper

Over the month the Russell 1000, FTSE 250, and Eurozone indices outperformed FTSE All-World, while the Russell 2000, Japan, Asia Pacific, FTSE 100, and Emerging indices lagged.

Equity Global funds move from second to first place in May (+€13.24bn: mutual funds, +€6.32bn; ETFs +€6.93bn). Target Maturity Bond EUR 2020+, often used by institutions as liquid cash equivalents, saw inflows of €6.32bn.

Equity Europe flows (+€4.23bn: mutual funds, +€1.44bn; ETFs +€2.79bn) continued to outpace their US equivalents, coming out of their shadow in 2024, as did Equity Emerging Markets Global (+€2.58bn: mutual funds, +€1.02bn; ETFs +€1.55bn), despite weaker performance over the month.

Money Market TRY (Turkish lira) funds have seen heavy outflows YTD, following a strong 2024—and similarly strong inflows—curtailed by a weakening lira and regulatory changes in Q1 compelling them to hold at least 10% of their portfolios in lira-denominated government bonds. We commented in April’s report that this seemed to be slowing, and in May these funds rebounded into positive territory, with inflows of €2.86bn.

Conversely, the worst outflows were suffered by Money Market EUR funds (-€12.42bn), which went from first to last from April to May, as investors deployed some of April’s €39.14bn inflows elsewhere over May. The European Central Bank’s May cut to 2% in late May off the back of sub-2% inflation lessens the attractiveness of euro-denominated cash, but, at 2.25%, the previous rate was hardly a screaming buy. Money Market GBP funds also suffered outflows over the month (-€2.4bn).

Equity China continued to see outflows (-€0.75bn), in the context of investor fears about the impact of tariffs on the country’s manufacturing sector. However, it still did better than the Equity UK (-€2.69bn), which seems to suffer outflows irrespective of either performance or positive predictions.

Lastly, while unease over US equities hasn’t thrown Equity US into negative territory as yet (+€2.39bn), rather acting as a break on inflows, Equity US Small & Mid Cap hasn’t been so lucky (-€1.48bn), with the Russell 2000 also being in negative territory YTD.

Fund Flows by Lipper Global Classification, Year to Date

Graph 5: Ten Best- and Worst Lipper Global Classifications by Estimated Net Sales, January 1 – May 31, 2025 (€bn)

Source: LSEG Lipper

The heavy May outflows for Money Market EUR push it into second place YTD (+€49.37bn: mutual funds, +€42.98bn; ETFs +€6.39bn), with Equity Global taking the top slot (+€55.39bn: mutual funds, +€23.54bn; ETFs +€31.85bn). Despite little movement over the month, Money Market USD funds retain third place YTD (+€31.77bn).

The general market preference for liquidity YTD can be seen from the combined flows to Money Market EUR, USD, and GBP funds, along with Target Maturity Bond EUR 2020+ and Bond EUR Short Term (+€106.91bn). However, with the trajectory of central bank rates being down, especially in the Eurozone, it will be interesting to see if this pushes investors further out on the yield curve, and away from cash.

It’s hard to determine a clear signal from bond fund flows in the YTD data, but eyeballing the underlying table, government and diversified bond funds tend to be in the black, with corporates and high yield in the red. With spreads remaining tight, one could argue that investors don’t see much value in moving up the risk curve, despite EUR high yield offering the best return for unit risk, according to FTSE Russell analysis. However, Bond USD Government is an exception (-€0.75bn, with –€1.42bn in May), with the market getting understandably jittery about the prospect of unfunded tax cuts. Bond EMU Government funds could well be the beneficiaries of investors looking for an alternative (+€5.21bn).

Small caps are also feeling the pain, with a combined €8.7bn being redeemed from Equity Europe, UK, and US Small & Mid Cap funds so far this year.

Fund Flows by Promoter

Fund Flows by Promoter, May 2025

Graph 6: Ten Best-Selling Fund Promoters in Europe, May 2025 (€bn)

Source: LSEG Lipper

BlackRock takes the lead in May, supported by strong ETF sales (+€6.87bn: mutual funds, -€3.41bn; ETFs +€10.28bn), followed by Amundi (+€5.29bn: mutual funds, +€2.98bn; ETFs +€2.31bn).

The figures suggest a strong month for passives, with Vanguard (+€3.47bn: mutual funds, +€0.27bn; ETFs +€3.2bn) and State Street (+€2.95bn: mutual funds, +€1.79bn; ETFs +€1.16bn) also doing well.

Fund Flows by Promoter, Year to Date

Graph 7: Ten Best-Selling Fund Promoters in Europe, January 1 – May 31, 2025 (€bn)

Source: LSEG Lipper

Strong May flows help Vanguard (+€21.9bn: mutual funds, €5.22bn; ETFs +€16.68bn) leapfrog JPMorgan (+€19.08bn: mutual funds, +€16.05bn; ETFs +€3.03bn) YTD. However, all lag BlackRock (+€51.07bn: mutual funds, +€3.69bn; ETFs +€47.38bn).